Running a small business, even in the best of times, can be daunting. And in the midst of an ongoing global pandemic, it is anything but business as usual. Many small business owners are doing everything they can to weather the storm while also looking for ways to seize growth opportunities.
There’s no tested playbook for these unprecedented times, but there is support. Intuit QuickBooks’ new Cash Flow Planner tool, rolling out this week helps small business owners understand their expenses and get ready for their future—whatever the future may be.
The benefits of managing cash flow
Cash flow is a major challenge for all kinds of business owners. According to Intuit, over 60% of small business owners have lost sleep in the past year due to a cash flow-related problem, and a third of all small businesses have made poor decisions such as delaying payroll or defaulting on a loan that ends up hurting their long-term potential.
“When we see that managing cash flow is that big of a problem, we know we have to act and try to solve those challenges,” says Melika Hope, the Head of Product at Intuit QuickBooks Canada. “It can be really overwhelming. So, what we’re trying to do is take advantage of the huge amount of data we have as a platform and remove some of that burden from the small business owners.”
“There’s a comfort and confidence that comes with knowing how much money you’re going to have.”Melika Hope, Head of Product, QuickBooks Canada
QuickBooks’ Cash Flow Planner is a tool that helps owners make informed decisions about budgeting and short-term spending by forecasting available money and automatically highlighting upcoming transactions and cash crunches at a glance. The tool gathers all of the information over the last year from your QuickBooks Online accountant and uses AI to predict what your cash flow looks like every single day for the next three months.
Armed with that knowledge, small business owners can make confident decisions about what their next steps should be. That may mean hiring a short-term contractor to help out with a new product or campaign launch or moving around some transactions and bills in order to make payroll and keep the business running smoothly.
The Cash Flow Planner is built for active QuickBooks users. Based on prior data, Cash Flow Planner can determine how long it typically takes for invoices to be paid, when bills are coming, how much and how often payroll is, and more.
“The more you use Cash Flow Planner, the more we’re able to ingest that data and the better predictions we’re able to make,” explains Hope. “As users get into it, they’ll get more and more value out of it.”
After logging historical data, Cash Flow Planner uses AI to compare and analyze budgets against over 60 billion anonymized data points. The result is a personalized 90-day forecast that outlines potential bumps in the road or pockets of cash that might help a business owner make a new investment and expand their reach. Business owners can even move transactions around to see if they can free up cash for new opportunities.
“Business owners have a million things to think about all day. If we can take away one of those decisions and help make it for them, that’s invaluable,” says Hope. “Cash Flow Planner can help you plan for the future—say, investing in new equipment to help you grow. Or if you’re going to be short on payroll next month, you can use it to make a decision and see major expenses and delay one of those to get through payroll.”
According to an Intuit study, a quarter of small business owners have missed a revenue growth opportunity due to their lack of knowledge around cash flow planning. Chances to expand come up, but it’s too difficult to forecast if the payoff is worth the risk. Understanding cash flow not only helps provide a window into expenses but also a new sense of confidence.
Inspiring confidence through cash flow
“There is a comfort and confidence that comes with knowing how much money you’re going to have, exactly what type of scenarios you’re going to be in, and knowing you’re going to be okay,” says Hope. “The fact that you can make a decision and not lose sleep because you’re terrified it will have implications for your business, employees, and family is so important.”
Cash Flow Planner is a simple and fast way to get answers to very specific situations. A few years ago, if a business owner wanted to know if they were going to make payroll, or able to launch a new marketing campaign, it would take a lot of hours spent in an Excel sheet. Now answers come in a matter of minutes.
“You can spend a ton of time with guesswork for major financial moments,” says Hope. “Calculating all the money coming in and estimating money going out while guessing that customers pay invoices on time. With Cash Flow Planner, you create a transaction and it can immediately say if it’s a good idea or not, then if it does look risky, you can move around other transactions to see if you can make it work.”
Predicting the new normal
The business landscape right now is volatile. Plain and simple—it’s impossible to predict what will happen during a pandemic. What’s important now is informed cash flow planning for the immediate future and preparation for the new normal. The important thing is that business will return to normal at some point, and that’s when understanding cash flow will be more valuable than ever.
Over the last few months, Intuit launched small business relief programs and pivoted its product roadmap to launch Cash Flow Planner in Canada and across the globe earlier than expected, asking “What can we do to help small biz owners right now?”
As businesses pivot and find new ways to connect with customers, it’s vital to get on top of planning and preparing for the future, so when business resumes, owners will be ready. This is what the new normal will look like—business owners future-proofing themselves by using technology and historical data to inspire confidence in decisions.
With this in mind, Cash Flow Planner can help businesses trend towards and prepare for their resurgence. For the ones that see a light at the end of the tunnel, it’s crucial to hit the ground running.
“When businesses are getting started again, they will want to get a grasp on cash flow and be better prepared,” says Hope. “Owners can look at historical data for deeper understanding. If they know June is historically a tough time for them, they know they need to be more prepared. Or if August is their peak period, it might help them to expand.”
The idea of “normal” is so critical for businesses striving to get back there. By tracking and understanding cash flow, at minimum, owners can be prepared for their normal. And, in the best case, use that normal as a springboard for growth and a way to put the pandemic behind them.